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Equipment Finance

A Detailed Guide to Equipment Financing in India

Whether it is a small-scale company or a large enterprise, business owners need equipment and machinery to thrive in this ever-competitive market. Upgradation of existing machinery is also important for a successful business. To be able to fund such expenses, equipment financing is the best option available to business owners.

Equipment financing is a type of credit facility available for both small and large enterprises. Companies availing this type of loan may also enjoy tax benefits associated with the same. There are several factors to consider before availing equipment financing.

THINGS TO CONSIDER WHEN LOOKING FOR EQUIPMENT FINANCING:

Interest rates:

Interest rates levied on equipment loans is one of the factors to consider before availing the loan. The rates will vary depending on the banks, NBFCs and other financial institutions. Some of the financial institutes may also levy additional fees, service charge and GST as per the rules of the government. Interest rates may range from 8 % to 20 % depending on the type of equipment in your business facility. You can research different financial institutions and compare interest rates online. Avail equipment loan that is best suitable to you as per your budget.

Eligibility Criteria:

There are specific eligibility criteria set by the banks. Check below to know whether your business firm is eligible to apply for equipment financing –

  • You will have to present income tax return statement for the past two years
  • Stable business for the last two years
  • The company should be making a profit for the past three years
  • Public, private, partnership, trust, proprietorship, corporates are eligible to apply for equipment loans

WHAT ARE THE BENEFITS OF EQUIPMENT LOAN?

There are several benefits available for business owners availing equipment loans. Some of the benefits include:

  • Some of the financial institutions offer 100 % financing for the purchase of new equipment.
  • Mostly, these types of loans are collateral-free, i.e. you don’t have to back it up with security.
  • The procedure is hassle-free with lenders giving a pre-approval for an equipment loan.
  • Flexible repayment options are available for borrowers.
  • Ensure that you get most of the above benefits while availing loan for business equipment.

WHAT ARE THE TYPES OF EQUIPMENT LOANS?

There are different types of loans for different types of equipment and machinery in your business setup. Some of the common types of equipment loan include:

  • Manufacturing equipment loan
  • Medical equipment loan
  • Construction equipment loan
  • Electronic and appliances loan, etc.

The points mentioned above will help you apply for an equipment loan in India. However, before using it is also imperative to check the credibility of the financial institution offering the loan facility.

Do speak with our advisor to know more about Equipment Finance in India or Equipment Finance Companies in India.

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